NOTE: This is an automatic translation of a blog, which I have written and published in May 2016 and updated in December 2017 in German language (see: https://kubraconsult.blog/2017/12/07/daten-und-fakten-zur-europaeischen-union-update-12-2017/).
In the run-up to the (very intense and controversial) discussion in the UK about the so-called BREXIT, I compiled in May 2016 some informative facts about the European Union from various publicly available sources that should be known by educated EU citizens.
On the occasion of the proposals of the EU Commission of December 6, 2017 for the transformation of the Eurozone, which paves the way for a transfer union (see: https://www.n-tv.de/politik/Bruessel-schlaegt-EU-Waehrungsfonds-vor- article20169971.html ), as well as the demand of the leader of the German Social Democratic Party (SPD), Martin Schulz, at the SPD party congress on December 7, 2017 to transform the European Union into the „United States of Europe“ within the next 8 years until 2025 (see: https: // www.n-tv.de/politik/Schulz-will-United-States-of-Europa-article20172092.html) I have updated the essential data and facts in this article and marked the updates in bold letters.
The European Union (EU) is a confederation of 28 member states (as of 2017). Unlike the United States of America (US), which is a federal presidential republic composed of 50 relatively homogeneous states (plus Washington DC), the 28 EU member states have not only largely different languages but differ from each other also in terms of their economic strength, culture, mentality of the population, history, or interests in some significant extent. The cultural diversity and the history spanning many centuries make up the special charm of „old Europe“.
An overview on the language families in Europe and their geographical distribution is provided in the following chart of unknown origin:
The European Union has its origins in the period after the Second World War. According to official accounts, everything started with the promotion of economic cooperation (see addendum at the end of this article). Behind it was the idea that countries that trade with each other, intertwine and therefore tend to avoid warlike conflicts. The result was the founding of the European Economic Community (EEC) in 1957/58 and growing economic cooperation between six countries – originally Belgium, Germany, France, Italy, Luxembourg and the Netherlands. Over the next 55 years or so, the EU single market has created the largest common economic area in the world in several stages of expansion. The EU is an independent legal entity and therefore has the right to inspect and speak at the United Nations.
On the question of what the European Union does for ordinary citizens, there was a fairly good overview of the European Information Center Lower Saxony (EIZ) under the heading „Why the EU is important: 10 good reasons„:
From this and various other sources I have extracted the following points:
- Securing peace in Europe (however, it is an open question, whether the EU can actually claim to be a „peace project“ and deserves the merit of no more wars between the member states since the founding of the EEC/EU – NATO probably plays the more important role in this regard even though it does not include Austria, Sweden and Finland)
- Free movement of goods, persons, services and capital (the four so-called „fundamental freedoms“) – including the free movement of EU citizens in their choice of place of residence and employment
- Definition of minimum democratic standards for EU states and codification of fundamental rights, e.g. in the „Charter of Fundamental Rights of the European Union“, including children, labor and data protection rights
- The Euro as a single currency within the Eurozone, so that no currency exchange is required when traveling (which I consider to be a rather weak argument, since payments today can be handled largely without cash)
- Coping with the Euro crisis (which would not have taken place without the Euro) through billion-dollar bailouts (EFSF and ESM)
- Pan-European Banking Control (Single Supervisory/Resolution Mechanism), which would also not be necessary to this extent without the Euro
- Regulation of the competition, which for example, it has reduced the number of roaming charges within the EU by more than 80% since 2007
- EU structural assistance to align structurally and economically weaker regions with the EU average or to encourage innovation (e.g. Investment Plan for Europe)
- Freedom of travel, so there are no border controls within the Schengen area and you do not need a passport (which, however, leads to considerable disadvantages in the fight against terrorists and extremists)
- Europe-wide cooperation of the judicial and police authorities on the fight against crime e.g. by the European Police Office EUROPOL and the European Judicial and Customs Authority EURJUST
- Europe-wide mutual recognition of professional diplomas, school certificates and training certificates
- Studying in other European countries through Erasmus programs (more than 2.5 million students since 1987)
- Promotion of environmental protection e.g. by renewable energy or guidelines for water and waste, nature conservation, flora & fauna, end-of-life car recycling or air quality.
- Comprehensive consumer protection rules with uniform minimum standards for quality, safety and health including labeling of genetically modified food, compatibility of cosmetics or safety of children’s toys
The price for these achievements is (in addition to the cost for the EU budget and a certain amount of bureaucracy) the partial abandonment of national sovereign rights or their relocation from the institutions of the EU member states to central EU institutions. A good example of this, with an extreme effects, is the shifting of responsibility for the currency from the central banks of the eighteen Eurozone countries to the European Central Bank.
In view of the EU’s peacekeeping effect, it should not be forgotten that EU member states such as the United Kingdom, France, Spain or Germany, in their dual role as NATO member states, have actively been involved in the wars in former Yugoslavia, Afghanistan, Iraq, Libya or Involved in Syria. Furthermore, in the immediate neighborhood of the EU, namely in the Ukraine since 2014, a more or less open-ended war is smoldering, which the EU at least was not able to prevent.
ESSENTIAL DATA AND FACTS ON THE EUROPEAN UNION
The European Union is made up of 28 member states (https://europa.eu/european-union/about-eu/countries_en) in 2013, following the accession of the youngest member state of Croatia in 2013, and currently has 24 official languages. The United Kingdom remains legally a member of the European Union until the conclusion of the exit negotiations, with all the rights and obligations deriving therefrom. Outside Europe, the EU also includes some (extraterritorial) overseas territories, such as B. Mayotte northwest of Madagascar on the east coast of Africa and French Guiana in South America.
The European Economic Area (EEA) comprises the member states of the European Union, as well as Iceland, Liechtenstein and Norway. The EEA is a deep free trade area between the European Union and the European Free Trade Association (EFTA). The agreement of May 2, 1992, concluded by the EFTA member states (with the exception of Switzerland) and the Member States of the EU, extended the European single market to Iceland, Liechtenstein and Norway, so that it now comprises a total of 31 countries. Based on the data from 1994, with approximately 372 million inhabitants and an annual economic output of over 7.5 trillion US dollars, the largest economic zone in the world, from the Arctic to the Mediterranean, which at that time represented about half of world trade. In particular, the four freedoms of goods, persons, services and capital, with special rules for agricultural goods, apply throughout the EEA.
The continent of Europe consists of a total of 47 states. Not or not yet a member of the European Union are the following 19 states with in total 231.3 million people and a GDP of 3.46 trillion USD (as of 2016). The source of the Gross Domestic Product (GDP) data in brackets is the International Monetary Fund.
- Albania (GDP = 12.126 billion USD in 2016)
- Andorra (GPD = 3.249 billion USD in 2016)
- Bosnia and Herzegovina (GDP = 16.605 billion USD in 2016)
- Iceland (GDP = 20.047 billion USD in 2016)
- Kosovo (GDP = 7.047 billion USD in 2016)
- Liechtenstein (GDP = 5.488 billion USD in 2016)
- Macedonia (GDP = 10.912 billion USD in 2016)
- Moldova (GDP = 6.750 billion USD in 2016)
- Monaco (GDP = 7.060 billion USD in 2016)
- Montenegro (GDP = 4.126 billion USD in 2016)
- Norway (GDP = 370.449 billion USD in 2016)
- Russia (GDP = 1.283 trillion USD in 2016)
- San Marino (GDP = 1.592 billion USD in 2016)
- Switzerland (GDP = 669.038 billion USD in 2016)
- Serbia (GDP = 37.745 billion USD in 2016)
- Turkey (GDP = 863.390 billion USD in 2016)
- Ukraine (GDP = 93.263 billion USD in 2016)
- Vatican City (GDP = NN in 2016)
- Belarus (GDP = 48.847 billion USD in 2016)
In the 28 Member States of the European Union, around 511.81 million people lived in early 2017, while the continent of Europe (depending on the definition) in 2015 was populated by a total of 743.1 million people.
Little geographic excursus:
Europe as a continent does not have a clear geographic or geological boundary to Asia in the East. That is why the „borders of Europe“ are a matter of social agreement. A geographical definition of Europe is always arbitrary. According to a well-known formulation by the French publicist Bernard-Henri Lévy, Europe is „not a place but an idea“.
Today, the demarcation between Europe and Asia usually follows the definition of the Swedish geographer Philipp Johann von Strahlenberg. After that, the Ural Mountains and river form the eastern border of Europe. Between the Caspian Sea and the Black Sea, the borderline runs through the „Kuma-Manchich-Lowland“ north of the Caucasus Mountains, as in its place once a sea road connected the Caspian Sea with the Black Sea. In English- and French-speaking countries, the border along the Caucasus main ridge is drawn slightly different. According to both definitions, Azerbaijan, Armenia and Georgia do not belong to the continent of Europe but to Asia. The territories of Russia, Turkey and Kazakhstan are each only a minor part of Europe (Russia: 23%, Turkey: 3% and Kazakhstan: 5.4%), while each of the larger area of these three countries belong to the Asian continent.
Overall, Europe covers an area of approximately 10.5 million square kilometers, making it the second smallest of the seven continents after Australia (sorted by size: Asia, Africa, North America, South America, Antarctica, Europe and Australia).The northernmost point of the European mainland lies on the peninsula Nordkin in Norway, the southernmost is the Punta de Tarifa in Spain, the westernmost the Cabo da Roca in Portugal. The north-south extent is about 3800 km. In the east-west direction, the European mainland measures about 6000 km, from the Ural Mountains in Russia to the Atlantic coast of Portugal.
The following table shows the 47 countries of the European continent sorted by population in 2012 (Note: For Russia, Turkey and Kazakhstan only the European shares are listed in the table). The sum of the inhabitants in the table with 713.2 million is slightly lower than the above 743.1 million, as it is – as mentioned – data from the year 2012.
Note: The table illustrates quite well that the equal treatment of EU Member States (in the sense of „one country, one vote“ or „one country, one representative“) in the European Council (Heads of State), the European Commission and the Council the European Union (Council of Ministers) leads to significant imbalances. For example, the EU commissioner from Malta represents 418,000 inhabitants with his vote, while the EU commissioner from Germany represents 196 times the number of inhabitants, namely 81,890,000 – to highlight the two extremes within the European Union (the gross domestic product Germany is even at 344 times the gross domestic product of Malta). Only in the European Parliament the 751 MEPs are divided among the Member States according to their population size. I will return to this point of criticism at the end of my blog when it comes to the democratic legitimacy of the European Union.
The Eurozone comprises 19 states with 341.0 million people using the Euro as their common currency (https://www.ecb.europa.eu/euro/intro/html/map.en.html).
A statistics on the gross domestic product of the EU member states for the year 2016 can be found here: http://de.statista.com/statistik/daten/studie/188776/umfrage/bruttoinlandsprodukt-bip-in-den-eu-laendern/.
Information on the population of the EU Member States in 2017 incl. forecasts for the years 2030, 2050 and 2080 can be found here: http://de.statista.com/statistik/daten/studie/164004/umfrage/prognostiziert-bevoelkerungsentwicklung-in -the-laendern-der-eu /.
The source for the essential information below on the EU treaties is: https://europa.eu/european-union/law/treaties_en.
The European Union is based on the rule of law. This means that every activity of the EU is based on treaties that have been adopted by all EU Member States on a voluntary and democratic basis. For example, if a policy is not mentioned in a treaty, the European Commission can not put forward a legislative proposal in this area.
Under the EU treaties, the EU institutions can enact legislation that is subsequently implemented by the Member States.
The most important EU treaties (in chronological order) are:
- Treaty of Lisbon, which came into force on December 1, 2009, with the aim of becoming a more democratic and effective EU, capable of tackling global issues such as climate change better and speaking with one voice.
- Treaty of Nice, which entered into force on February 1, 2003, with the following objective: A reform of the EU institutions so that the EU could effectively fulfill its tasks even after its enlargement to 25 Member States.
- Treaty of Amsterdam, which entered into force on May 1, 1999, with the following objective: A reform of the EU institutions in preparation for the accession of new Member States.
- Maastricht Treaty, which came into force on November 1, 1993, with the following objective: to prepare for the European Monetary Union and to introduce elements of a political union (citizenship of the Union, common foreign and domestic policy).
- Single European Act, which came into force on July 1, 1987, with the following objective: to reform the institutions in preparation for the accession of Portugal and Spain and to accelerate the decision-making process in the completion of the internal market.
- Merger Agreement – Treaty of Brussels, which came into force on July 1, 1967, with the following objective: Reorganization of the European Institutions
- Treaty of Rome, which entered into force on January 1, 1958, with the following objective: to set up the European Economic Community (EEC) and the European Atomic Energy Community (Euratom).
- Treaty establishing the European Coal and Steel Community (ECCG), which entered into force on July 23, 1952, with the aim of creating a dependency between the coal and steel industries so that one country can no longer mobilize without the knowledge of the other armed forces can. This measure counteracted mistrust and tensions after the Second World War. The ECSC Treaty expired in 2002.
Member States have delegated some of their sovereign rights in the European Union to independent institutions representing Community, national and citizens‘ interests. In total, according to the Treaty on European Union (TEU), there are the following seven bodies:
- The European Parliament (President: Antonio Tajani since January 17, 2017)
- The European Council (President: Donald Tusk since December 1, 2014)
- The Council of the European Union (Council of Ministers whose Presidency changes every six months in a specific order), Estonia’s Presidency of the Council in the second half of 2017, Bulgaria in the first half of 2018 – see „List of EU Presidencies by 2030„
- The European Commission (President: Jean-Claude Juncker since November 1, 2014)
- The European Court of Justice (Chairman: Koen Lenaerts since October 8, 2015)
- The European Central Bank (President: Mario Draghi since November 1, 2011)
- The European Court of Auditors (President: Klaus-Heiner Lehne since September 13, 2016)
The following 7-minute video explains very clearly the institutions of the European Union mentioned above: https://youtu.be/SEyRg5tSxIg.
The European Commission consists of 28 EU Commissioners (including the President and 7 Vice-Presidents), each from one of the 28 Member States. The Commissioners are committed to safeguarding the interests of the European Union. Their term is 5 years. The President of the EU Commission is currently Jean-Claude Juncker (Luxembourg), Germany is represented by Günther Oettinger. The names of the current EU Commissioners can be found here: https://ec.europa.eu/commission/commissioners/2014-2019_en.
As an independent organization with legal personality, the European Union also has its own legislative powers. While in the legal systems of the Member States Parliament represents the will of the people, in the European Union it is the representatives of the EU member states in the Council of the European Union (Council of Ministers) who play an important role in legislation. For binding acts of general application (regulations and directives), the European Parliament has a right of codecision, but the representatives of the governments of the Member States must also agree in these areas. The vast majority of EU laws are adopted jointly by the European Parliament and the Council of the European Union (Council of Ministers).
On the one hand, the legal acts of the European Union are divided into legislative acts and non-legislative acts. On the other hand, they are classified in Article 288 TFEU according to their legal effects in:
In principle, the adoption of EU legislative acts is as follows:
- Commission proposal
- Participation of the European Parliament to varying degrees (no participation, consultation, consent or equal consent)
- Consultation of the advisory bodies
- Decision of the Council of the European Union (Council of Ministers)
The difference in the European Parliament’s involvement thus constitutes the main difference in the different legislative procedures.
As a rule, the European Commission has the sole right of initiative, which is considered by some to be a democratic deficit of the European Union. However, the European Parliament and the Council of the European Union may ask the European Commission to propose a legislative act. Such a request is also possible for citizens of the European Union in the framework of a citizens‘ initiative (Article 11 of the EU Treaty and Article 24 TFEU).
Unanimity is required in the Council of the European Union (Council of Ministers) on some matters that EU Member States consider sensitive, such as:
- Common foreign and security policy (except for some clearly defined cases where a qualified majority is required, such as the appointment of a Special Representative)
- Civil rights (granting new rights to EU citizens)
- EU membership
- Harmonization of national legislation on indirect taxation
- EU finances (own resources, multiannual financial framework)
- some provisions in the field of justice and home affairs (European public prosecutor, family law, operational police cooperation, etc.)
- Harmonization of national social security and social protection legislation
In addition, deviations from an EU Commission proposal require unanimity in the Council, unless the EU Commission can accept the changes to its proposal. This regulation does not apply to legal acts adopted by the Council on the recommendation of the EU Commission, for example in the area of economic policy coordination.
55,000 civil servants work for the EU (see: https://ec.europa.eu/germany/eu60/verwaltungsmoloch_en); the EU Parliament has 751 MEPs (see: https://de.wikipedia.org/wiki/Liste_der_Mitglieder_des_8._Europäische_Parlamentes), who are elected every 5 years. Since income and security of EU parliamentarians and EU officials are often in the public criticism (e.g. „workplace Brussels: tax-free allowances, high pensions, no risk of dismissal“, see also this slightly older graphic from 2013: http: // www.netz-trends.de/id/3302/Studie-Einkommen-Diaeten-EU-Abordnete-Millionaere-nach-fuenf-Jahren-sind-EU-Parlamentarier/) I would like to briefly list some facts.
The MEP Dr. Angelika Niebler from the CSU explains quite clearly on her homepage how the income of an MEP is composed – see: http://www.angelika-niebler.de/phpwcms/index.php?was-ich-verdiene-1. The gross income of a member of the European Parliament is € 20,331.00/month , if he uses all the funds and lump sums. In detail these are:
€ 9,516.00/month Compensation (this corresponds to 38.05% of the salary of a judge at the European Court of Justice)
4,342.00 €/month lump-sum expense-allowance
6,120.00 €/month attendance fee (maximum 20 meeting days/month x € 306.00/session day)
353.00 €/month travel expenses (maximum € 4,234.00/year)
= 20,331.00 €/month (gross) Total
Note: According to Dr. med. Angelika Niebler taxed her income in Germany, so that of the € 9,516.00/month compensation after deduction of income tax, solidarity surcharge, church tax and contributions to health and long-term care insurance, a net income of about € 4,100.00 a month remains.
In addition, each member of the European Parliament can spend 24,164.00 €/month as a reimbursement of staff costs (e.g. for personal assistants). Although this is a continuous item, which of course also costs the taxpayer money.
The calendar of meetings of the European Parliament comprises 60 days of plenary sessions, 120 days committee meetings and 60 days of political groups. This is a total of 240 days/year or 20 days/month. The members of the European Parliament receive a daily allowance of € 306.00/session day.
The President of the European Parliament (currently Antonio Tajani) still receives some special benefits, namely € 3,663.00/month residence allowance and € 1,418.00/month representation allowance (these figures are from 2014). In addition, he has two company cars and two drivers and even receives the attendance fee for 365 days/year – that is 365 x € 306.00/session day = € 111,690.00/year.
In 2013, of the 55,000 EU officials, 1,760 earned more than the German Federal President (€18,173.00/month gross) and 4,365 more than the German Chancellor (€ 16,359.00/month gross) (see: http: // www. welt.de/wirtschaft/article113330591/4365-EU-Beamte-verdie-mehr-als-he-Kanzlerin.html).
Some interesting documents on the so-called „EU Staff Regulations“, including a comparison of salaries and taxation of German officials and EU officials, can be found on the homepage of the Chairman of the EU Budgetary Control Committee, Inge Gräßle: http://www.inge-graessle.eu/EU-Personalstatut as well as here: https://www.gehaltsvergleich.com/news/Wie-viel-verdienen-Beamte-der-Europaeischen-Kommission.
Deputies in the European Parliament may receive up to 70% of their compensation (currently € 9,516.00), depending on their length of service. In Germany, the gross pension level, i.e. a standard pension measured in terms of average income, will fall by around seven percentage points from 46 to 39 percent by 2040.
Another criticism of the European Union refers to the much cited EU bureaucracy with its alleged regulatory anger under the influence of lobbyists. According to Lobbycontrol, an estimated 20,000 lobbyists in Brussels are influencing the EU institutions. About 70 percent of them work for companies and business associations (source: https://www.lobbycontrol.de/schwerpunkt/lobbyismus-in-der-eu/).
A reasonably well researched and balanced article from the Süddeutsche Zeitung of May 15, 2014 on the subject of EU bureaucracy and regulatory anger can be found here: http://www.sueddeutsche.de/politik/ungerechtfertigte-vorwuerfe-an-die-eu-was-hinter-dem-buerokratie-irrsinn-steckt-1.1957663.
The question, which states benefit the most from their membership in the European Union and which „pay down“ on the bottom line, is a highly controversial one. The answer to this question is so complex that a qualified answer to it is hard to give. As the following facts show, Germany was by far the largest net contributor to the EU budget at € 13.19 billion in 2016 (deposits of € 23.27 billion compared to payouts of € 10.08 billion). On the other hand, of course, the export-oriented German economy benefits disproportionately from the EU internal market.
To be added to this, are the effects of the Euro and the low or zero interest rate policy (including purchases of government and corporate bonds), which has been used by the European Central Bank since the outbreak of the global financial crisis in 2008. The German state with its approx. € 2.15 trillion of public debt benefits from this monetary policy, while the capital investments (insurance, pensions) of the German citizens are yielding ever lower returns.
Furthermore, the monetary policy of the ECB in recent years has steadily reduced the value of the Euro against the US dollar (about 1.18 USD/EUR currently vs. 1.60 USD/EUR at the all-time high of the Euro in July 2008). This depreciation is initially beneficial to companies exporting their goods to non-Eurozone countries, while Eurozone citizens have to pay higher prices for consumer goods imported from outside the Eurozone (e.g. computers).
Incidentally, the German economy exported goods valued at € 1.21 trillion in 2016 – of which € 707.69 billion went to EU countries (€ 442.51 billion to the euro area, € 265.18 billion to the „non-euro zone“) and € 496.60 billion to third countries, of which € 200.46 billion to Asia, € 147.71 billion to America, € 113.53 billion to Europe (outside the EU), € 24.52 billion to Africa and € 10,38 billion to Australia and Oceania (source: http://de.statista.com/statistik/daten/studie/158303/umfrage/deutsche-exporte-und-importe-2010-nach-laendergruppen/).
The top 5 of Germany’s most important trading partners in 2016 were the USA (export volume = € 106.82 billion), France (export volume = € 101.11 billion), the United Kingdom (export volume = € 85.94 billion), the Netherlands (export volume = € 78,43 billion) and China (export volume = € 76.05 billion). Source: https://www.destatis.de/DE/ZahlenFakten/GesamtwirtschaftUmwelt/Aussenhandel/Tabellen/RangfolgeHandelspartner.pdf.
Last but not least, with low currency and stock prices there is of course a not inconsiderable danger that European or German companies will be affected by competitors or affiliates, e.g. from the U.S. or China. An interesting article on this issue can be found here: http://www.handelsblatt.com/my/unternehmen/industrie/chinesische-uebernahmen-in-deutschland-firmenkaeufe-folgen-einem-masterplan/12894476.html.
As the graph below shows, net payments to the EU budget now account for only a fraction of the burdens and risks caused by the EU and, above all, by the Eurozone in the EU Member States. The outbreak of the global financial crisis in 2008 was a dam failure that turned the misconstructed Eurosystem into a bottomless pit for Germany. The sum of transfer payments and default risks is now € 2.19 trillion higher than the (official) German government debt of € 1.98 trillion.
As it would be beyond the scope of this paper to cover and assess all the above facets, I will focus on the EU budget and pending flows of payments. The European Council gave the go-ahead for the 2017 EU budget on November 28, 2016, by approving the agreement reached on November 17, 2016, with the European Parliament. The EU budget for 2017 was adopted on December 1, 2016, after the European Parliament had confirmed the agreement. The EU budget for 2017 foresees a total of € 157.86 billion in commitments and € 134.49 billion in payments over the following six spending areas (source: http://www.consilium.europa.eu/en/policies/eu-annual-budget/2017/):
- € 74.89 billion (47.45%) commitments and € 56.522 billion (42.03%) payments for „Smart and Inclusive Growth“ (about three-quarters of which go to support underdeveloped regions and disadvantaged groups in the EU and about a quarter in promoting the competitiveness of European companies)
- € 58.584 billion (37.11%) commitments and € 54.914 billion (40.83%) payments for „Sustainable Natural Resources Growth“ (which covers measures to produce safe food, innovative agriculture, and efficient and sustainable use of agricultural and forestry land )
- € 9.395 billion (5.95%) commitments and € 9.395 billion (6.99%) payments for „management“ (this includes the running costs of the EU institutions – essentially the European Commission, the European Parliament and the Council of the European Union) European Union – including the costs of translators and interpreters who ensure that information is available in all EU official languages)
- € 10.162 billion (6.44%) commitments and € 9.483 billion (7.05%) payments for „Europe in the world“ (which conceals EU commitments to other countries, such as promoting economic and social development , Peacekeeping or assistance to victims of natural disasters and conflicts).
- € 4.284 billion (2.71%) commitments and € 3.787 billion (2.82%) payments for „Security and Union Guarantee „
- € 0.534 billion (0.3%) commitments and € 0.390 billion (0.3%) payments for „Special Instruments“
The money from the EU budget should be used in areas where it makes sense to pool resources for the benefit of Europe as a whole. Examples for this are:
- the development of transport routes, energy networks and communication links between EU countries,
- the protection of the environment throughout Europe,
- increasing the global competitiveness of the European economy,
- the promotion of cross-border associations of European scientists and researchers.
Responsible for the allocation of funds from the EU budget is the EU Commission.
EU member states pay money into the EU budget and receive money from the EU budget. Interesting is the balance that results from the deposits and withdrawals per EU member state. On the basis of the data for 2016, which I have taken from the „EU Financial Report 2016“ (see: http://ec.europa.eu/budget/library/figures/internet-tables-all-revised.xls) following picture (sorted by the amount of the balance of deposits and disbursements, NR = Net Recipient, NC = Net Contributer):
Country: Deposit – Disbursement = balance in billions of € each
- NR01. Poland: € 3.553 billion – € 10.638 billion = + € 7.085 billion
- NR02. Romania: € 1.374 billion – € 7.360 billion = + € 5.986 billion
- NR03. Greece: € 1.509 billion – € 5.850 billion = + € 4.341 billion
- NR04. Belgium: € 3.611 billion – € 7.333 billion = + € 3,722 billion
- NR05. Hungary: € 0.924 billion – € 4.546 billion = + € 3.622 billion
- NR06. Czech Republic: € 1.361 billion – € 4.690 billion = + € 3.329 billion
- NR07. Spain: € 9.564 billion – € 11.593 billion = + € 2.029 billion
- NR08. Slovakia: € 0.666 billion – € 2.663 billion = + € 2.017 billion
- NR09. Bulgaria: € 0.382 billion – € 2.345 billion = + € 1.963 billion
- NR10. Portugal: € 1.587 billion – € 3.384 billion = + € 1.797 billion
- NR11. Luxembourg: € 0.311 billion – € 1.788 billion = + € 1.477 billion
- NR12. Lithuania: € 0.319 billion – € 1.477 billion = + € 1.158 billion
- NR13. Croatia: € 0.391 billion – € 0.921 billion = + € 0.530 billion
- NR14. Latvia: € 0.218 billion – € 0.734 billion = + € 0.516 billion
- NR15. Estonia: € 0.183 billion – € 0.674 billion = + € 0.491 billion
- NR16. Ireland: € 1.675 billion – € 2.038 billion = + € 0.363 billion
- NR17. Slovenia: € 0.339 billion – € 0.545 billion = + € 0.206 billion
- NR18. Malta: € 0.081 billion – € 0.208 billion = + € 0.127 billion
- NR19. Cyprus: € 0.159 billion – € 0.185 billion = + € 0.026 billion
- NC09. Finland: € 1.829 billion – € 1.531 billion = (- € 0.298 billion)
- NC08. Denmark: € 2.203 billion – € 1.431 billion = (- € 0.772 billion)
- NC07. Austria: € 2.763 billion – € 1.940 billion = (- € 0.823 billion)
- NC06. Sweden: € 3.313 billion – € 1.712 billion = (€ 1.601 billion)
- NC05. Netherlands: € 4.343 billion – € 2.289 billion = (- € 2.054 billion)
- NC04. Italy: € 13.940 billion – € 11.592 billion = (- € 2.348 billion)
- NC03. United Kingdom: € 12.760 billion – € 7.052 billion = (€ – 5.708 billion)
- NC02. France: € 19.476 billion – € 11.275 billion = (- € 8.201 billion)
- NC01. Germany: € 23.274 billion – € 10.082 billion = (- € 13.192 billion)
Conclusion on the above list:
- 9 Net Contributors (NC) face 19 Net Recipients (NR). Greece and Portugal not only receive transfer payments from the EU budget, but also from the so-called „Euro rescue packages“.
- € 117.875 billion was paid into the EU budget by the 28 EU Member States in 2016, while € 112.080 billion was distributed from the EU budget to the 28 EU Member States in 2016 (difference = € 5.795 billion).
- Poland, with a balance of € 7.085 billion, was the largest Net Recipient of the 2016 EU budget, followed by Romania with € 5.986 billion, Greece with € 4.341 billion, Belgium with € 3.722 billion and Hungary with € 3.622 billion.
- At € 13.192 billion, Germany was by far the largest Net Contributor to the EU budget in 2016, followed by France at € 8.201 billion, the United Kingdom at € 5.708 billion, Italy at € 2.348 billion and the Netherlands at € 2.054 billion.
- Why wealthy Luxembourg pays only € 0.311 billion to the EU budget, but receives € 1.788 billion from the EU budget (positive balance of € 1.477 billion from the perspective of Luxembourg) is at first glance just as incomprehensible as the the fact that Belgium pays € 3.611 billion to the EU budget but receives € 7.333 billion (positive balance of € 3.722 billion from the perspective of Belgium).
- The aforementioned redistributions within the EU budget add up to € 40.785 billion (net negative balances of Net Receivers/NR) and € 34.997 billion (total positive balances of Net Contributors/NC). This does not include the guarantees and transfer payments made available under the so-called „Euro rescue packages“, for example Greece or Portugal. From the first two bailouts for Greece alone results in a risk of about € 50 billion for the German taxpayer.
The following chart is taken from a very interesting study by the Center for European Policy (CEP) of September 2016 titled „Redistribution between EU Member States – winners and losers of European transfers“ and represents the average annual redistribution by the EU budget in the European Union Period from 2008 to 2015 in millions of euros (see: https://www.cep.eu/en/eu-topics/details/cep/umverteilung-zwischen-den-eu-mitgliedstaaten-en.html):
The British rebate (also British bonus or British check, officially UK compensation) is a regulation for the budget of the European Union, which grants the United Kingdom a special status compared to other EU members.
The agreement was approved by the European Council in 1984 at the instigation of the then British Prime Minister Margaret Thatcher; it grants Great Britain a discount on its contributions. It calculates how much Britain pays into the European Union’s budget and how much of it is returned to the UK (through subsidies, subsidies, etc.). As a rule, more is paid in than flows back, so the UK is a so-called net contributor. The discount is 66 percent of the net contribution. It reached its peak at around € 7.3 billion in 2001; in 2005, this discount was approximately € 5.2 billion. Overall, the rebate between 1985 and 2014 totaled over € 111.0 billion.
The rationale for the scheme was that British agriculture was then smaller than that of other EC countries, which is why Great Britain and Northern Ireland could not benefit equally from agricultural subsidies under the common agricultural policy, such as France or Germany. Another argument was that in 1984, in the EC comparison, the UK’s prosperity level was low. The British rebate was negotiated by then-British Prime Minister Margaret Thatcher, who had blocked many of the decisions of the European Communities in previous years, referring to the „British budget question“, thereby contributing to the so-called Eurosklerose crisis. The formula became known „What we are asking for is a very large amount of our own money back!“ (German: „What we ask is that we get back a very large part of our own money!“), which Ms. Thatcher used to express her ambitious objective in the lengthy negotiations.
As part of the negotiations on the future multiannual financial framework of the EU budget for the period 2007 to 2013, in June 2005 more votes from other Member States were called for a reduction or abolition of the rebate. A big advocate of the discount reduction was e.g., the then French President Jacques Chirac. On June 14, 2005, the Luxembourg Presidency under Jean-Claude Juncker proposed freezing the UK rebate at the current level and continuing to reduce it from 2007, but the UK Government under Tony Blair refused. In December 2005, the negotiations came to a head. Angela Merkel, German Chancellor since the 2005 general election, made a compromise proposal. On December 17, 2005, agreement was reached that the British rebate should be significantly reduced by 2013. Despite this agreement, not all EU members fully agreed with this rule, as it still contains inequalities. One of the main arguments put forward is that the UK is now one of the richest EU countries. In the fall of 2012, Prime Minister David Cameron lost the annual (but not binding) vote on the European budget in Parliament against a coalition of Labor, Scottish nationalists and 53 MEPs calling for a freeze on the EU budget, leading to the tipping plans The remaining EU members are in complete contradiction.
CONCLUSIONS AND CRITICAL ASSESSMENT
Finally, from the perspective of critics, the European Union suffers from a serious (overall) democratic deficit, mainly because its institutions make far-reaching decisions that are binding (directly or indirectly) on the citizens of the Union, even though these bodies are not according to the democratic elementary principle „one man one vote“. Without a unified state people, according to the critics of the structural democratic deficit, the EU lacks elementary democratic legitimacy anyway.
The diversity of languages and the lack of „European media“ do not permit a pan-European political-public discourse. The existing media are geared not only linguistically but also in content mainly to national concerns. Without an EU-wide public, however, no common identity of „EU state people“ could arise. So far, there are only isolated approaches to address this problem, such as the German-French channel ARTE or Euronews. The English language as a lingua franca (trade and linguistic language) can not overcome the problem of linguistic diversity, since many people lack the appropriate professional vocabulary to pursue or lead political disputes appropriately. (source: https://de.wikipedia.org/wiki/Demokratiedefizit_der_Europäische_Union).
Moreover, from the point of view of constitutional law-makers, the European Union has considerable deficits in democracy, because „constitutionalisation“ of European treaties makes it easy to legislate. For example, competition law, in which EU states automatically receive constitutional status, and thus political discussions and decisions at national level is withdrawn. In captivating analyzes, the former Federal Constitutional Court judge Dieter Grimm got to the bottom of this EU democracy problem (Europe yes – but which one?, C.H. Beck Verlag). Grimm shows how the legal basis of the EU, the Treaty of Rome, was „constitutionalized“, which means, it received the function that constitutions have in the nation state. This would also set topics stone in stone in the Treaties, which are simple law in the Member States – „as if the entire Commercial Code was part of the Basic Law“. The more the EU treaties require, the less scope national parliaments have, and the stronger the EU Commission and the European Court of Justice become. By stating that it is a „market access obstacle“, they can attack national standards of protection and override parts of public services. Grimm sees this as the real reason for privatization pressure („less state, more market“); the Member States have their hands tied, and they can barely decide what to leave to the market and what they want to state-run.
Democratization and depoliticization – this is the finding of the sociologist Hauke Brunkhorst (The Double Face of Europe, Suhrkamp Verlag). The most powerful institutions in the EU are not the parliament and the government, but the central bank and the court, while the secret constitution of Europe is in the fight for the fetish „competitiveness“. Where formerly class and distribution battles were fought, today it is about adapting to market requirements. Therefore, the public hardly argues about substantial political goals, they argue, if anything, about Draghi’s interest rates. As a result, the old difference between left and right disappears and is replaced by the distinction of „Europe-friendly“ or „anti-European“.
The Second German Television (ZDF) has published in 2017 an interesting documentary titled „The seven biggest mistakes of the EU“, which was available in the ZDF-Mediathek from May 19 to 26, 2017. I can only recommend that every interested citizen take the 45 minutes to look at the documentation, because it makes it clear that the EU was never a project that focused on citizens‘ interests (see: https://youtu.be/Wjm_FjQD_Ow).
Instead, key decisions such as the inclusion of Greece in the EU, EU enlargement to the east or the introduction of the Euro were dominated by the power-political, economic or geo-strategic interests of individual member states or the USA. This is true even of the founding of the EEC in 1957, when the US wanted to push back the influence of communism in Europe.
In addition, the EU was/is used to protect the economic interests of lobbying groups, e.g. by regulation or deregulation.
Especially with regard to the topics „Euro“ and „democratic deficit“, important facts are not mentioned in the documentation, probably for reasons of time. For example, neither the EU Commission nor the EU Council of Ministers will be filled according to the principle of „one man, one vote“ – which in my view is the EU’s biggest democratic deficit.